Thursday, February 17, 2011

Long range look at Portland home prices

I finally put a trend line in my long range graph.

Every projection has assumptions and here are my assumptions:

1. The median home price in 1991 was 90,000 in Portland. I'm assuming they were under valued a little because of the nasty recession (depression) Oregon fighting through in the late 80's. This is why I started at 100,000 rather than 90,000.

2. The inflation rate is a constant 3% per year.

3. Home prices tend to rise at the same rate as inflation.

I was very surprised by the results. If my assumptions are reasonable then we still have a ways to fall, on the other hand maybe some of my input values are off. What do you think?